When the long-term charts are in sync with the shorter-term time periods, you have the making of a great trade set-up. Such is the case with the GBP, which you can trade via futures, interbank, or FXB.
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The GBP is rallying after the election in the UK, but that doesn’t tell the whole story. Check out the weekly chart below.
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And the GBP Monthly Continuous chart:
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Whatever is happening in the UK, their economy is not going to change overnight b/c of an election, despite how smoothly it might have gone or how “selfless” Gordon Brown acted. Same goes for the US, of course.
The GBP has a long way to go before the downtrend will change. Like in my Gold, Euro, S&P 500 Bailout Aftermath post, you’d look to fade the UK election on the reversal down. You can use your intraday charts to pinpoint the reversal.
You can see how to identify a trend reversal in my earlier post How To Marry Fundamental & Technical Analysis in Cocoa.
